USD Index bounced nicely last week from 80.75 low, in impulsive fashion on the smaller time frame and now showing evidence of a bullish reversal after recent corrective pull-back down to 81.00 level labeled as wave 2. As such, we expect a continuation higher, into a third leg of recovery which will ideally be wave 3 of an impulsive sequence. First upward objective is around 82.50. Divergence line on the RSI is reacting as a support and also suggests a bounce in price.
USD Index 4h Elliott Wave Analysis
Usually when USD Index rally, then other majors such as EUR, GBP and CHF will fall. We are looking at the GBPUSD that has found resistance last week around 1.5715, exactly at wave A)=C) equality level where zig-zag usually forms a turning point. In fact, decline from above 1.5700 appears to be a leading diagonal which means this is a first leg of a minimum three waves down. Ideally we will see a strong sell-off in black wave 3 towards 1.5100 which will accelerate once market closes on a daily basis below 1.5415 support. Resistance in the near-term for GBPUSD is at 1.5580-1.5600.
GBPUSD 4h Elliott Wave Analysis
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